What is a Contingency Fee?
When it comes to lawyers in Colorado, many potential clients wonder “how much is a lawyer going to cost me” and “what is a contingency fee?” At Cook, Bradford & Levy, LLC, our Boulder personal injury lawyers understand this concern, and in this article, we hope to give you some insight in understanding what a contingency fee is, and why most personal injury law firms represent clients on a contingency basis. Before we get into detail about contingency fees, we want to give you a quick background on the different ways that people who need an attorney can pay for one. Additionally, if you want a more detailed understanding about contingency fees, we invite you to call our office today at 303-543-1000 for a free consultation with one of our experienced Lafayette, Colorado personal injury attorneys.Types of Attorney Fee Arrangements
Generally speaking, there are three ways that a person can hire a lawyer: 1) on an hourly basis by paying the lawyer’s hourly rate; 2) on a contingency basis, paying by an agreed upon percentage at the end of the case (typical for Boulder County personal injury lawyers); or 3) a flat-fee, which is one lump sum to cover all work that may (or may not) need to be done on a case. Of course, potential clients are also able to hire their lawyers using a combination of these methods.
Historically in Colorado, each of these three methods of paying a lawyer has its pros and cons, and which payment method is used usually depends on the nature of the legal work that the attorney is being asked to perform. For example, hiring a lawyer on an hourly-basis may make sense for a business that needs help with a business processes, where questions of hiring and firing employees, mergers and acquisitions, or structuring an entity, etc., often arise.The Contingency Fee Arrangement
On the other hand, because the hourly rates of an experienced Boulder personal injury attorney can exceed $400 an hour, people need to have other options when they need legal help. Contingency fees are a vital option for getting legal help when the cost of hiring a lawyer on an hourly basis is significant and nearly impossible expense for a person or a household. This is especially true if a person has been injured and is unable to work or has suffered some sort of financial setback as a result of the accident. While contingency-fee arrangements are nearly universal in the personal injury world, we should note that in other areas of the law, such as criminal law, contingency fees have been found to be unethical in Colorado.
In the civil context, a contingency fee allows most people access to a lawyer without the necessity of up-front payment or being stuck with a large bill after a case has resolved. Because a Longmont personal injury attorney who is paid on a contingency basis only gets paid if there is money at the end of the case (sometimes referred to as a “successful” outcome), contingency-fee arrangements also provide extra incentive for an attorney to maximize the financial recovery for the client.
Boulder personal injury lawyers typically charge contingency fees of 33-35%. What this means is that the attorney gets paid 33-35% of the gross (total) case settlement and only at the end of the case. For example, if a case settles for $250,000.00, and the fee is 33%, the attorney fee is .33 of $250,000.00, or $82,500.00. Often personal injury lawyers will charge more if a case is unable to settle and requires litigation or trial. In this scenario fees tend to be around 40% of the total recovery, which is because of the significant time it takes for a lawyer to litigate a single case.
At Cook, Bradford & Levy, LLC, our Lafayette personal injury lawyers are here to help you if you or a loved one has been injured or killed in an accident. We invite you to call us today at 303-543-1000 for a free consultation with our legal team about how we might be able to help you with your case.